What to Expect From Visa Earnings

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Visa Inc. (NYSE: V) is scheduled to release its fiscal fourth-quarter financial results after the markets close on Monday. The consensus estimates from Thomson Reuters are $0.73 in earnings per share (EPS) and $4.23 billion in revenue. The same period of last year reportedly had $0.62 in EPS and $3.57 billion.

In the most recent earnings report, both Visa and PayPal Holdings Inc. (NASDAQ: PYPL) announced a strategic partnership to expand their long-standing relationship that will result in an improved and more seamless shopping experience and greater choice in how consumers pay.

The online payment company will also gain access to Visa’s tokenization services, starting in the United States, for in-store PayPal transactions. This will expand acceptance for PayPal’s digital wallet to all physical retail locations where Visa contactless transactions are enabled. The partnership’s benefits will include greater accessibility and volumes for Visa payment instruments in the PayPal digital wallet.

Despite this deal not being immediately accretive, PayPal and Visa are opening up to a whole new cardless system of payments, where they will compete directly with Apple and Alphabet. PayPal only has a market cap of about $53 billion, which pales in comparison to these other giants, but with Visa’s financial network and backing this partnership could gobble up market share in this space.

A few analysts weighed in on Visa ahead of the earnings report:

  • Barclays reiterated an Overweight rating with a $100 price target.
  • Jefferies reiterated a Buy rating with a $93 price target.
  • Wedbush reiterated a Neutral rating with a $77 price target.
  • Nomura reiterated a Buy rating with a $91 price target.
  • Deutsche Bank reiterated a Buy rating with a $103 price target.
  • Robert Baird reiterated an Outperform rating with a $95 price target.
  • Cowen reiterated an Outperform rating with a $100 price target.
  • Keefe Bruyett & Woods reiterated an Outperform rating with a $99 price target.
  • Pacific Crest has a Buy rating with a $92 price target.

So far in 2016, Visa has performed more or less in line with the broad markets, with the stock up about 6%. Over the past 52 weeks, the stock is up over 8%.

Shares of Visa closed Friday at $82.35, with a consensus analyst price target of $92.43 and a 52-week trading range of $66.12 to $83.79. In early trading indications Monday, the stock was up about 1% at $83.20.